The FDIC has led the way in seeking to end the housing crisis, and Treasury could contract with the Federal Deposit Insurance Corporation (FDIC) in restructuring efforts. There is finally bipartisan agreement that stemming the flow of home foreclosures and restructuring troubled mortgages will help slow the economy's downward spiral. It should also help stabilize home prices, which are still declining.

The Treasury Department is currently preparing a $40 billion program to help delinquent homeowners avoid foreclosure. This plan is still under development. It's designed to help up to 3 million troubled homeowners by reducing their monthly mortgage payment. But, the plan doesn't entail reducing the principal balance on the homes unless there is no other option. You could trying refinancing your home through FHASecure, which expires on December 31, 2008, or through the new Hope for Homeowners that just started on October 1, 2008 and doesn't end until September 30, 2011. But, you may not qualify if you're too upside down on your loan. Plus, lenders must volunteer to write down your loan to 90% of your home's current value. They are not required to participate.

So, what are you options for legally modifying a mortgage loan?
Loan modification is becoming a popular option with homeowners looking to prevent foreclosure and they are popular bankruptcy alternatives. While it is possible for borrowers to negotiate a loan modification themselves, it's extremely difficult, and many lenders are non-responsive mainly because they are so overwhelmed with loan modification inquiries and proposals. This puts the borrower in a worse position as their loan becomes more delinquent. This is why people will generally go with either a mortgage modification company or a loan modification lawyer to represent them in loan modification negotiations.

Which is better, a loan modification company or a loan modification lawyer?
A mortgage modification company that you find online or in a phone book may or may not have an attorney on staff, which is we recommend that you go with a loan modification lawyer, also known as a foreclosure prevention lawyer. Choosing a loan modification lawyer is imperative to protect yourself against foreclosure if modifying your loan is unsuccessful. They know real estate law and what constitutes a proper loan.

Homeowners nationwide have been successful getting loan modifications, forbearances and mortgage rate reductions. The reason for this is because loan modification lawyers are actually real estate lawyers that specialize in loan modifications and foreclosure prevention. They are intimately familiar with the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). If a lender violates either of these, it could a highly effective bargaining chip for you. This is why it's so important to get a loan modification lawyer.

There are just simply too many instances where fly-by-night mortgage modification companies spring up claiming they can work miracles. But, in the end, they end up ripping people off and making them worse off than they were before. With a loan modification lawyer, you are assured that any and all activity pertaining to your loan modification negotiations is legal. The lawyer can’t afford to engage in illegal activity or to rip you off because he or she could end up being disbarred for such actions. A good way to make sure that you’re getting a lawyer who will act in your best interest is to check with the state bar association to see if any complaints have been lodged against the lawyer. Check with the Better Business Bureau, as well.